A Technological Breakthrough That Increases the Marginal Productivity of Capital

question 116

Multiple Choice

A technological breakthrough that increases the marginal productivity of capital would increase the

• A)demand for loanable funds, leading to a lower equilibrium market interest rate
• B)supply of loanable funds, leading to a lower equilibrium market interest rate
• C)demand for loanable funds, leading to a higher equilibrium market interest rate
• D)supply of loanable funds, leading to a higher equilibrium market interest rate
• E)supply of loanable funds but have no impact on the equilibrium market interest rate

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Definitions:

Base Pay

The initial salary paid to an employee, not including any extra bonuses, benefits, or raises.

Merit Pay

A compensation strategy where employees receive salary increases or bonuses based on their performance evaluations, aimed at rewarding high-quality work.

Incentive Pay

Additional compensation awarded to employees as a means of encouraging increased productivity or performance.

Subjective Performance

An evaluation of an employee's work based on personal judgments or opinions, rather than measurable outcomes or metrics.